Guide

Fair Dealing Under the FMCA — What NZ Motor Insurers Can and Can't Say

The Financial Markets Conduct Act 2013 (FMCA) sets the statutory floor for how insurers and comparator sites must talk about their products. Misleading or deceptive conduct is prohibited — and enforceable by the FMA with civil penalties.

The legal framework

Part 2 of the Financial Markets Conduct Act 2013 contains the fair-dealing provisions for financial products and services in NZ. Three sections matter most for motor insurance:

  • Section 19 — Misleading or deceptive conduct
  • Section 20 — False or misleading representations
  • Section 21 — Unsubstantiated representations

These apply to anyone "in trade" who deals in financial products — that includes insurers, brokers, comparators (like this site), and Financial Advice Providers. The Financial Markets Authority (FMA) enforces the provisions.

What's prohibited

Section 19 — Misleading or deceptive conduct

Engaging in conduct that is, or is likely to be, misleading or deceptive about any aspect of a financial product or service. This is the broadest provision. It covers:

  • Headline statements that overstate cover or affordability
  • Implied claims via imagery (e.g. depicting a scenario the policy doesn't actually cover)
  • Omissions where a reasonable consumer would expect disclosure

Section 20 — False or misleading representations

Specific representations that are false or misleading — about price, terms, conditions, sponsorship, affiliation, or endorsement. Common motor-insurance examples:

  • "Save hundreds a year" without a substantiated basis
  • "#1 rated insurer" without a disclosed methodology
  • "All claims accepted" / "perfect claim record" — unsubstantiable and almost certainly false
  • "Best for young drivers" without an objective basis

Section 21 — Unsubstantiated representations

Making a representation about a financial product without reasonable grounds for it. This is the section that prevents "we recommend X" without disclosed methodology. The burden of proof is on the maker — if you say something, you must be able to substantiate it.

What this means in practice

For insurer marketing

NZ motor insurer ads are noticeably restrained compared to overseas markets — no "save thousands" pitches, no "we beat any quote" claims, no superlatives without disclosed methodology. The FMCA constrains what's possible. Insurers can still say:

  • "Comprehensive cover starts from $X/month" — but only if that figure is genuinely achievable and the qualifying conditions are disclosed alongside
  • "Voted [award] by [body]" — if the award is real and the methodology is independently published
  • "Our wording covers [specific peril]" — pointing at the actual wording for substantiation

For comparator sites (like us)

Section 19 applies to comparator framing too. We can't:

  • Display fabricated star ratings ("4.5/5 stars" without disclosed methodology — that's why we don't show ratings)
  • Claim "we compare every NZ insurer" if we don't (we compare 12 — that's disclosed)
  • Surface premiums from data we can't verify (which is why we say "premiums vary — get a quote")
  • Rank insurers in "best for X" tables without disclosed criteria

The fair-dealing audit (`scripts/audit-fabricated-claims.cjs` in this site's source) enforces these constraints in our own content — every page is checked at build time for fabricated $-amounts, made-up percentages, future-dated content, fake testimonials and unverifiable rankings.

FMA guidance documents

The FMA publishes guidance on fair-dealing application:

  • FMA Library — published guidance and information sheets
  • Various enforcement actions and settlements are also published — searchable for case studies

Penalties

Civil penalties for fair-dealing breaches can be substantial — up to $1 million for individuals and $5 million for companies per breach, plus compensation orders for affected consumers. Reputational impact (enforcement is publicly announced) is often the larger consequence.

Reporting a breach

If you believe an insurer or comparator has breached fair-dealing provisions, you can:

  1. Raise it with the entity directly (often resolves)
  2. If unresolved, lodge a complaint with the relevant EDR scheme (FSCL or IFSO — see our disputes guide)
  3. Report to the FMA at fma.govt.nz/contact-us/report-a-concern

Where to read more

Get a quote